Equity Analysis /
Saudi Arabia

Saudi Cement Monthly: Exports support overall performance

    Mohamed Tomalieh
    Mohamed Tomalieh

    Associate, Equity Research Analyst

    SNB Capital
    14 May 2019
    Published by

    In April 2019, local cement sales continued its negative trend, declining -6.7% yoy to 3.8mn tons. We believe the ongoing decline in sales reflects the muted demand expectations for H1 19, as demand from mega projects remains limited. However, growth in export sales supported overall cement and clinker sales, which grew +3.1% yoy (4.7mn tons).

    Local sales: Local cement sales declined -6.7% yoy to 3.8mn tons in April 2019. This took YTD declines to -8.7% yoy.

    Export sales: Cement exports stood at 0.18mn tons in April 2019 vs 0.09mn tons in April 2018. Clinker exports stood at 0.60mn tons in April 2019 vs 0.33mn tons in April 2018.

    Production: Clinker production declined -12.8% yoy to 3.4mn tons in April 2019. This took YTD production decline to -0.7% yoy.

    Inventory: Clinker inventory increased +15.0% yoy (-2.0% mom) to 40.7mn tons in April 2019.

    Market share: Saudi Cement gained the largest market share on local sales at +67bps to 11.7%, while Yamama Cement lost -76bps to 8.9%.

    Outlook: We believe exports will support overall sales performance in H1 19, with demand from mega projects expected as of Q4 19. We believe companies in the Western region are best positioned to benefit from both export opportunities and demand from mega projects during 2019.